BOND KING ROCKS THE BOND MARKET

BOND KING, BILL GROSS, ROCKS THE BOND MARKET AND STOCK MARKET RETREATS 238 POINTS

 

Bill Gross, known for his prowess in the bond market for 43 years, has left PIMCO the company he created. He is leaving to join Janus Capital after months of subpar performance of his flagship fund, Total Return Fund.

By no means has Bill Gross lost his ability to read the bond market. He simply has no experience, along with every other investment professional, in reading the government and the central banks which have been running the markets since 2008.

The bond “scare” has come from the liquidation of billions of dollars invested in his funds from PIMCO. Does this affect our bonds?   NO, because we hold individual bonds of companies that are doing fine. We do not hold shares of a bond FUND that is not doing fine. This is why I have formulated “Unit Investment Trusts” specifically for my clients because they are not bought and sold every day as bond fund shares are.

The stock market is reacting to fears that if the economy improves the Federal Reserve will stop supporting it (the stock market) with low interest rates. Money will flee into bonds which are safer and will be paying more attractive yields that they have the last 6 years.

 

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